What You Need to Know About Starting a U.S. Company From India

A global business presence is a key to guaranteed success these days. The demand for developing international companies has grown significantly, thanks to lighter policies and the promotion of growing industries throughout the globe. Consequently, many business owners from several parts of the world look forward to registering a business in the USA.

Even though starting a U.S. company from India can be as easy as a few steps, you still need to become acquainted with the overall process of establishing one in the USA. For you to register a company in the U.S. from India, you are not required to use a U.S. mailing address or be a U.S. resident or visa holder.

This article will give you the essential ideas on how to start a U.S. company from India. Specifically, you will learn how to incorporate a U.S. company as a foreign founder, obtain a U.S. registered agent, and transfer an India-registered company’s business registration to the USA. Moreover, you’ll also learn the advantages of registering your business in the U.S. and the basics of hiring, taxes, and work visas.

Incorporating a U.S. Company as a Foreign Founder in India

Here are the steps on how to incorporate a U.S. company as a foreign founder in India:

1. Determine the most compatible type of business entity for your company. Most investors have a preference for C-Corporations, and so do the majority of Indian businesses.

2. Select which state you must register your business. In Delaware, for example, tech companies and even roughly 70 percent of Fortune 1000 companies comprise the vast majority of registered businesses.

3. Choose an incorporation service to help you file your Articles of Incorporation according to your overall budget.

4. Acquire an employer identification number or EIN from the U.S. Internal Revenue Service (IRS). Once the registration with the IRS completes, you do not have to worry about your corporation paying for taxes.

5. Use your newly obtained EIN to open a U.S. bank account. This bank account is vital for conducting business in the U.S.

6. File reports consistently to maintain your company’s good standing. Filing reports in Delaware, for instance, is done annually.

Get Help From a U.S. Registered Agent

Although starting a company in the U.S. does not require you to live there, keep in mind that you should enlist the help of a U.S. registered agent for receiving mail on your behalf. Since a U.S. registered agent has a physical address in the state where you registered your business, it can receive official mail for you.

The official mail that the U.S. registered agent receives consists of reporting compliance notices, tax documents from the state’s revenue or tax department, notices of lawsuits against your business, and other services of process.

However, take note that the physical address of your U.S. registered agent cannot be the same as your company’s legal address, which in turn has to be your address in India.

Moving an India-Registered Company’s Registration to the USA

Suppose you have an India-registered company, and you want to transfer its registration to the USA. In that case, you can still move forward with it. However, there are particular requirements that you must meet to do so. The process, known by most experts as the “Delaware flip,” is best applied. At the same time, your business is still young and has only a handful of shareholders and no investors from outside.

Initially, the most important thing you have to do is register a C-Corporation in Delaware. It’s also necessary to appoint directors and officers as well as allocate shares.

Secondly, recruit accountants and lawyers in India so that you can secure any required regulatory approvals, which are extremely useful for converting your business. If possible, pay off any outstanding debt as well as warrants for equity.

Afterward, ensure that the shareholders within your Indian company consent to handing their equity over in exchange for the equity in your new Delaware corporation.

Finally, once you have done the above steps, your Indian equity will become a wholly-owned subsidiary of your new Delaware corporation.

The Advantages of Registering a U.S. Business from India

Registering a U.S. company from India – especially a Delaware corporation – provides a few compelling benefits. One of the most notable and perhaps the best advantages of doing so is accessibility to venture capital firms and even startup investors.

The whole point of registering a U.S. company from India is that it gives you immediate access to additional funds whenever you need them. This merit alone is worth celebrating because the growth of the Indian capital market has become more dynamic for the past three years.

Hiring, Taxes, and Work Visas

A few extra steps are needed to build a team of culturally diverse professionals. First, you should establish an Indian business entity so you can qualify for hiring team members locally. Next, convert the Indian business entity into a subsidiary of your Delaware C-Corporation.

Registering your company in the U.S. does not make an impact on your tax residency. Specifically, Indian citizens pay their taxes within India. Still, a U.S. company from India pays its taxes in the USA as a separate legal entity.

Further, registering a business in the U.S. does not require you to get a visa, but deciding to transfer to the U.S. to conduct business asks you to acquire one. E-1, EB-5, L-1, and O-1 are some of the work visas for Indian citizens.

Starting a U.S. Company from India not only gives you complete access to the world’s biggest startup capital market. It also allows you to do fundraising with aid from American venture capital firms and angel investors.